2020 (7) TMI 201 - AT - Central Excise

100% EOU - Benefit of N/N. 22/2003-CE dt.31.3.2003 and Para 3(e) of Notification No.52/2003-Cus dt.31.3.2003 - clearance of waste and scrap of HDPE drum, MS GI, Polymer, Paper, BOPP Tapes materials and other non-usable scraps, to DTA without payment of duty - Rule 9(b), 13, 14 192 of erstwhile Central Excise Rules, 1944 - HELD THAT - Admittedly, as per the show cause notices, the items cleared by the appellant are waste and scrap of HDPE drums, MS GI, Polymer, Paper, BOPP Tapes materials and other non-usable scraps. All these items are cleared as waste and scrap. In these circumstances, the appellant has rightly claimed the benefit of exemption notification No.52/2003-Cus dt.31.3.2003 Clause 4(c) and Notification No.22/2003-CE dt.31.3.2003 Clause 8(ii). The appellant has also relied on the decision of this Tribunal in the case of SUN PHARMACEUTICALS INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE ST, PUDUCHERRY 2018 (4) TMI 968 - CESTAT CHENNAI . On going through the facts of the said case, it is found that this Tribunal has allowed benefit to the appellant for clearance of empty drums which were usable by the buyer and allowed benefit of exemption notification. The case of the appellant in the present case is on better footing than that on Sun Pharmaceuticals Industries Ltd. The appellant has rightly claimed the benefit of the exemption notifications - no duty is payable by the appellant - demand of duty along with interest and also set aside penalties imposed on the appellant is also set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal arising from clearance of waste and scrap into DTA without payment of duty.

Analysis:
The appellant, a 100% EOU engaged in manufacturing generic formulations, was granted a Customs Private Bonded Warehouse License and executed B-17 Bonds under Central Excise Rules. They imported and procured materials without duty payment, clearing waste and scrap into DTA without duty payment. A show cause notice was issued, demanding duty on the waste and scrap cleared. The appellant contended that waste and scrap were sold in DTA as per EXIM Policy and relevant notifications, citing CBEC Circular and tribunal decisions in their favor.

The AR argued that the waste and scrap were reusable, thus not eligible for exemption. The Tribunal noted the items cleared were waste and scrap, falling under exemption notifications allowing clearance without duty payment for certain materials unsuitable for repeated use. The appellant's reliance on a tribunal decision supporting their case strengthened their position, leading to a decision in their favor.

In conclusion, the Tribunal held that the appellant correctly claimed exemption notifications for waste and scrap clearance, setting aside the duty demand, interest, and penalties. The appeals were allowed, and the impugned orders were set aside, providing a favorable outcome for the appellant.